The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1887-10-11
Daluaiialr Q5azette
TUESDAY. OCTOBER Il. 1887.
THE HAWAIIAN LOAN.
BY S. n. CASTLE.


first news of any such intended action
reached the Government and residents of
Honolulu from the Coast, reaching New York
and London by wire some days earlier than
IL reached Honolulu.
This mischievous and damaging report,
unthouoht of and unknown here, from
whence only its damaging effects could be
counteracted, inflicted serious evil by injur-
ing the credit of the Government, and cast
ing suspicion upon the enterprises of the
country, SO much so as to arrest the progress
of several very hopeful ones, which were we'll
advanced, but will be suspended, to the loss
of tue projectors and country, until public
confidence is restored.
1t was the consciousness, upon the stable
part of the residents, the property holders,
irrespective of race or nationality, of impend-
ing ruin to the prosperity of the country, un-
less the prodigal expenditure by the Govern
ment upon unnecessary and unwise objects
could be checked, that precipitated the revo-
luton of June Both. The proceedings of the
great mass meeting we're the farthest pos
slble from the unreasoning action of a mob.
They knew of no other way to secure good
government and prevent future insolvency
than the one adopted. Their intentions are
manifested in the admirable platform
adopted /: admirable for its brief and COM
preheusive statement of correct principles of
governmental action. I insert it that it may
be before the reader:
l. "That the autonomy and independence
of the Kingdom be preserved.
2. That the principles of rigid economy
be applied to every department of the Gov
ernment.
3. THAT as soon as practicable the rate of
taxation be reduced, and that the revenue of
the Kingdom be turned into channels of in
ternal improvements.
4. "That all unnecessary Offices in the
Government be abolished, and that excessive
salaries be curtailed.
5. "That provision be made for the liquid
alton of the national debt"
This is the whole platform, and where is
the nation that has Il better one? Disaster
might compel bankruptcy, but never repudia
tion. The prospects of prosperity and the
payment of all its liabilities were never
brighter in the nations history than now,
though careless and wreckless writer's may
injure the one, and postpone the other.
10 me, the meaning of the law" To au-
thorize National Loan, and define the uses
to which the money borrowed shall be ap-
piled seems plain and obvious enough.
Section l authorizes the Minister to issue
bonds for the purposes stated, not exceeding
$2,0O0,000.
Section 2 states the rate of interest at per
cent, exempts the bonds from taxation, fixes
the time at from five to twenty years, and the
payment of both principal and interest TO be
in gold coin of the United States or its equi-
valent. BY the laws of March ,, 1888, govern
ing the United States Treasury Department.
Section 3565, the value of the British pound
sterling in United States gold is fixed at
81 $3.50, which would make the equivalent
of S2000,0O0 III United States gold to be
within a small fraction, 1000, so that by
counting one pound as the equivalent of five
dollars, there would be a loss of $4,000 to
the Government, or so much less than the
law called for.
Section 3 fixes the commission which the
Minister may allow for the sale of the bonds
abroad not exceeding ) per cent, and forbids
the sale sat less than their nominal par
value in gold coin of the United States, of the
present standard"
Section 4 specifies the purposes to which
the borrowed money may be applied, aggre-
eating S1.9l4,0O0, and for "expense of float
ing the loan SS6,000," making the S2000,000,
and forbids the Minister from payit G from
this loan for any other than the SPECIFIED
purposes.
Section 3 empowers the Minister to make
the above named payments, "and such ex
penses as may be incurred for preparing said
bonds and coupons"
The third section was subsequently amend
ed SO as to allow the sale of the bonds at 50
per cent. of their face, instead of restricting it
to 100 or par, and the fourth section WAS
amended by redistribution of the borrowed
money, so that the amount applied to the
specific objects named is $1,900O09 instead
S1,9l4,000, and the "expense of floating the
loan" is allowed at 100000 instead of
$86,0O0 The expenses of floating the loan,
and to come from the 100000, are the COM
mis- ions, not to exceed per cent. upon the
actual amount of gold received FROM the
lender, and such expenses rs may be incurred
for preparing said bonds and coupons" These,
ID +La al,
Hized by the laiC.
To illustrate: Bonds for S1,000000 sold at
9S per cent, would produce S9S00O0; com
missions OF five per cent, $4,000, and the
expense of preparing the bonds and coupons
are the only expenses provided for by the
law. Suppose the sale to be for 105, the pro-
ceeds would be $l050,00O, the commission
$4,000, and the additional expense of the
bonds and coupons. In the first sale at 80,
the Syndicate should deliver to the Govern
ment S931 900, and in the last snle at l05,
$685., 800 net in United States gold coin, or its
equivalent. which. if i'll British gold, would
be 81 500 to the pound, as provided by
United States law.
have read the Loan law and its amend
ments with care, aid its meaning is obvious
and clear, without obscurity. The law pro-
vides for no expenses whatever, except COM
missions aud preparing bonds and coupons
the former limited to five per cent, and the
latter to the actual cost-and the price of
sale to SO per cent. If the loan could not be
effected ON these terms, then it would be a
faiure. The law gave nc discretionary
power to 90 beyond, but rigidly prohibited it.
The limit was plain, and the price ample
but if the law has been exceeded, thera has
been no whisper of repudiation--not a word
to diminish the value of the bond to the
bond-holder. If the bills of the broker are
excessive beyond warrant of law, it is a ques-
tion betlreeH him and the Government whether
such excess shall be paid and if the Legis-
lature tlnd it reasonable and just, no doubt
special appropriation will be made to pay
what the present law has not authorized.
The repudlatlon of any Just debt by IS feeble
Government where the creditor is backed by
a stronger one is ont of the question, for tue
stronger one will not permit it; but it mag
become insOlvent, aud the creditor suffer
And, rs ! SAID IN the commencement. il was
the conviction III the minds of MANY that the
prodigal expenses of the Administration were
nasteulng the country 10 insolvency. which
caused the revolution Of June 30th and / am
kiad 10 he able to say that in a residence of
more than fifty years. and before there was
any Constitution or Legislature. and having
known every Administration. | have never